Newsletter subscription status

Greece Locked In Negotiation with International Creditors to Avoid Default

Posted by admin

|

Date: May 23, 2015

|

In: International

May 02, 2015 – After the recent announcement that Greece was weeks away from running out of cash, the country is locked in negotiation with its international creditors as it races against the clock to evade a default as early as this month.

Although the talks have made progress in recent days, the differences between the two sides is still huge that is preventing them to reach a deal in time before the meeting between Euro Finance ministers that is scheduled to be held in May 11.

Jeroen Dijsselbloem, Euro group President who also holds the post of Dutch Finance minister, stated that at the moment both the Greek government and the creditors are working hard at clinching to a deal, but in the end we only look at results and they are not close to reaching a deal.

Faced with the debt payments of about 1 billion Euros to the IMF that is due on May 6th and 12th, Greek Prime Minister, Alex Tsipras, told his cabinet ministers last week on Thursday that he is confident that the two sides will come to a deal.

Greece hopes that it will be able to make a compromise with its creditors to allow the ECB (European Central Bank) to restore liquidity to the cash strapped banks in the country. However, the Greek government is sending inconsistent signals regarding its willingness to reform under the terms mandated by the ECB for the 240 billion euro bailout.

The optimism that financial aid by ECB is at hand allowed Athens stock index to appreciate to record highs in April. In fact, the rally in stock prices last month was the biggest in Western Europe when the market closed up 6.1%, its largest gain since September 2012.